Top Trading books

My list of top trading books

After reading 50+ trading books, some of them a few times, here is the list of ones I found the most helpful and impactful, with a short review

• "Reminiscences of a Stock Operator" by Edwin Lefèvre. This is a classic. Must read. Ideally get a 2009 edition with new commentary.  Amazon link here for your convenience. This book is about trading psychology (mindset, way of thinking) and "nothing" has changed in the markets for the past 100 years with regards to human emotions and trading mistakes.
• "Market Wizards" series by Jack D. Schwager. There are a few books, "Stock Market Wizadrs", "New Market Wizadrs", "Hedge fund Market Wizadrs". I strongly recommend. While they do not offer a specific trading system to follow, they include great insights, and the biggest one: you must find your own trading system that is right for you. amazon search.
• "High probability trading strategies" by Robert Miner. This one, unlike previous ones offer a complete, well described trading system! It also contains lots of universal trading rules (on risk management, position sizing, having a plan, a journal, etc.) And the trading system it describes is very complete, logical and with many examples.   (disclaimer: I was unable to make money using this system, but it is not this book's fault ;-) Unless you are allergic to Eliot Waves , I recommend. I am sure you will find some good take-aways there, even if you do not trading this system, it is a great example of how a trading system should be described. amazon.
• "Trading for a living" by Dr Alexander Elder. Very good one, especially for beginners. Even though he focuses on stocks not forex, the trading psychology rules are universal. So are indicators descriptions. In there you will also find universal rules of risk management, having a plan, journal, etc. See his newer books and how he trades divergences. amazon. Visit http://elder.com/
• "Trade your way to financial freedom" by Van Tharp is another must read, focusing on trading system development (elements, rules), position sizing (how many units/lots to trade and what it means to risk and potential profits), and also on psychology. Excellent explanation of how risk to reward vs. percentage of winning trades and frequency of trading opportunities, and costs, determine your net outcome. amazon. Check out also some newer books by Van Tharp and sign up for his newsletter at http://www.iitm.com/
• "Diary of a Professional Commodity Trader" by Peter L. Brandt is another one I enjoyed reading and found helpful. He is a chart patterns trader. And it is great if you read on multiple way to approach markets by different people. amazon
• "Trading in the Zone" by Mark Douglas. This one is a must read focusing primarily on psychology, mindset, "how to think" kind of things. Important stuff.  Please make sure you do the exercise he offers at the end of the book, i.e. take 20 trades using some mechanical trading system, to show yourself you can do it in a disciplined way.  amazon.
• "Currency Trading For Dummies" by Brian Dolan... I probably should have started with this one... if you are a beginner and prefer to learn from a book vs. from educational sites, get it.  amazon.

Note, these are not affiliate links. I recommend these books honestly and unbiased vs. trying to get a few percent commission from amazon affiliate program ;-) 

OK, there are many many others highly valuable books. But the list above probably gets you 80 for 20 knowledge vs. time.  I encourage you to read more, I read new books all the time, but I enjoy it a lot. 

At some point, you get from the books as much as you can and then you need to move on to other learning venues: demo trading, using forums to find and follow and learn from good traders who often help others, try to find a coach or mentor, attend some trainings, maybe some trading conferences, etc.  (topic for another post) 

Anyway, reading good trading books I believe is critical to become a profitable trader and here I offer my top list. Enjoy!


Update: March 16, 2014

This is to add two more books to my list

• "One Good Trade" by Mike Bellafiore and  "The PlayBook: An Inside Look at How to Think Like a Professional Trader" by Mike Bellafiore. 
• Both books by the author are very good. While he talks about prop trading desk, trading U.S. stocks and ETFs on a 1 minute charts and "tape reading", while I trade forex End-of-Day, so a very different approach, but everything about trading mindset, psychology, how to think, how to develop, how to learn - I am finding all of this very relevant and helpful for high quality end of day forex trading, which I do. 

I recommend. 

Update: April 22, 2014

This is a great book I am adding to my list:

• "Enhancing Trader Performance Proven Strategies From the Cutting Edge of Trading Psychology" by Brett N. Steenbarger